McCain did say Hagel could have a place in his own administration, and that he'll continue to talk to him and value his opinions.

The Arizona senator was in Nebraska for a fundraiser at the Strategic Air and Space Museum in Ashland. Former U.S. Rep. Hal Daub, chairman of McCain's Nebraska campaign, said the event raised more than $700,000.

In an interview with The Associated Press, McCain said he and Hagel are "close and dear friends" who came to different conclusions on the Iraq war. Hagel has been an outspoken critic of the war, while McCain says the United States needs to stay in Iraq and achieve victory.

Hagel, who is accompanying Obama on an upcoming trip to Iraq, told The Associated Press last month that he would consider serving as Obama's running mate if asked, but doesn't expect to be on any ticket.

McCain said he's not surprised people are talking about an Obama-Hagel ticket, calling Hagel a "respected leader in America" who "served his country admirably, with honor and distinction."

The 61-year-old Hagel served as an Army sergeant in Vietnam and was twice wounded in 1968, earning two Purple Hearts.

Although he hasn't endorsed either presidential hopeful, Hagel calls McCain a friend and has praised his military service. McCain was a Navy pilot who spent 5 1/2 years as a prisoner of war after his plane was shot down over Hanoi in 1967.

Hagel's Nebraska Senate colleague, Democrat Ben Nelson, said Wednesday he had no problem with his party picking Hagel or any other Republican to join the ticket.

"I think bipartisanship is underplayed in Washington and partisanship is overplayed," Nelson said during a conference call with reporters.

Hagel isn't seeking re-election.

Earlier Wednesday, McCain toured Werner Enterprises, an Omaha trucking company, and again promoted his plan for a summer suspension of the federal gas tax to help drivers cope with surging fuel prices.

Werner executives said that a year-long gas tax holiday would save them approximately $40 million, which could be spent on making their trucks more efficient.

Asked what individual Americans could do to lower the price of gas, McCain said they "can practice conservation" and pressure Congress to allow more offshore drilling for oil.

In the AP interview, McCain called ethanol an important part of lessening the United States' dependence on foreign oil, but said he doesn't support subsidies for the industry.

McCain has acknowledged facing hurdles in neighboring Iowa because of his opposition to the subsidies, an issue on voters' minds in farm states.

Former agriculture secretary Mike Johanns, a McCain supporter who attended the fundraiser, disagrees with McCain on ethanol subsidies, calling them "part of the reason the industry is growing."

Johanns, a Republican who's running to replace Hagel, said he would work with McCain if both are elected to determine the appropriate level of support.

"It's not that he's opposed to ethanol," Johanns said. "I think he's trying to figure out the right balance."

The money raised Wednesday will be split between the campaign, the Republican National Committee and several state parties, including Colorado, Minnesota, New Mexico and Wisconsin, according to a flier for the event.

The fundraiser drew more than 300 people, Daub said, and was "the beginning of a momentum that will carry through to the election," and ensure that all five of Nebraska's electoral votes go to McCain.

The heavily Republican state is unusual because it can split its electoral votes, although it's never happened. One is awarded to the winner of each of the three congressional districts; the other two go to the statewide winner.

Democrats think Obama could beat McCain in the congressional district that includes Omaha or the one that includes Lincoln.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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